David R. Henderson  

Friday Night Video: Life Without Capitalism

PRINT
Bartlett on Romney's Tax Plan... Two Verdicts on Two Replies to...

The Fund for American Studies put out this excellent 6-minute video. Posted with permission.


Comments and Sharing





COMMENTS (15 to date)
Kevin writes:

That's great, thanks for sharing!

Joel Johnson writes:

I don't see the value here. The video is boring. It feels like a glossy strawman takedown to me. I have never seen or met anyone who resembles the main character. Many people on the street protesting capitalism are living hard lives. They have been exploited in a capitalist system. This character in the video is unreal to me.

David R. Henderson writes:

@Joel Johnson,
I guess this video will work for some and not for others. The main character resembles a number of people I know: people who take the fruits of capitalism for granted and never make the connection between what they advocate and its likely effects.

Daniel Artz writes:

"Many people on the street protesting capitalism are living hard lives. They have been exploited in a capitalist system."

I have a very hard time taking this comment seriously. Just what does Joel Johnson mean by the word "exploited"? Have these people been coerced into unfavorable transactions? Were they somehow enslaved against their wills? That is fundamentally inconsistent with capitalism. Whenever I see someone use the word "exploitation" used to describe capitalism, I assume that what is really being said is that people hate the fact that capitalism makes people accept the consequences of their own bad choices.

Nacim writes:

I agree with Joel, even as a staunch supporter of free markets. This video is unlikely to convince anyone but the converted since it does indeed feel like a strawman. The picture painted of an anti-capitalist street protestor living alone in a single family suburban subdivision is stretching it, even if you can find an actual real life example. I also don't see the point of denigrating mass transit.

Methinks writes:

I am from the Soviet Union where life was a little less pretty even than it was depicted in the video (that kitchen is huge, the apartment not communal and filthy. It's practically a romantic version of life without capitalism). It is not a straw man because this is the reality of the alternatives to capitalism. The claim that nobody is arguing for this life is hollow and disingenuous in the face of the ample empirical evidence generated by romantic experiments with Socialism. It has never been any other way.

We risked our lives to come here nearly 37 years ago to be "exploited by capitalism". Socialism is the exploitation and torture (literally) of the masses by the political elite and the politically connected.

I have no doubt that this video will not convert anyone because I have learned long ago that history teaches people nothing. Americans will eagerly descend into the same hell before they fall out of love with the socialist illusion - and in particular, the illusion that it'll be different here.

Methinks writes:

BTW, for anyone who thinks these kids are living "hard lives"? Ha ha ha ha ha!

You don't know what a hard life is until the rationed local anesthesia wears off during major surgery and there's no more to be had. You don't know what a hard life is until the only food available anywhere in Moscow is sugar cubes. You have no idea what a hard life is until you have to criss cross Moscow (on public transport) to find basic necessities like milk and bread. You have no idea what a hard life is until your family is assigned to live in a communal apartment with an uncontrolled paranoid schizophrenic or a child molester who is eying your kid (no, you can't just move). And those are just some of the ordinary hardships.

Nobody in America lives or has ever lived a "hard life" by the standards of the system with which they wish to replace capitalism.

MG writes:

The video does capture a good deal of (a) the people who are professional protestors, even if they are not the majority of (b) those who may think capitalism is not working for them. Those who resort to these kind of protests offer "solutions" that are not worth more than the basic retort this video offers -- without all the negative externalities. If this video embarasses even one young person from group (b) into not joining sub-group (a) it would have been worth it. Then he can join those of us in exploring whether, and if so exactly how and why, freedom is not working.

Chris H writes:

Middle class white young people who protest a system that without which they wouldn't have a tenth of what they currently have, yea I know those guys. The "hard life" they live is the terrible fate of having an Xbox but not a PS3 too!

Even the poor in the United States have more than what people in actually socialist states (where the means of production are owned by the state) have.

Will this video convince many people? Of course not, but then almost nothing will convince most people to change beliefs. The benefits to changing political/economic belief systems are too limited and the costs too high (they're no way the guy who changed his mind is getting any action with the cute protest girl now).

Joel Johnson writes:

I appreciate all the comments here. Thanks David for responding and thanks for your perspective Methinks. I've been thinking about this video and protestors in general and my comment and your comments. I've been having trouble putting my finger on what about this video rubs me the wrong way.

As I said, it's boring; tiresome really. And glib. Didn't the Soviet Union collapse over twenty years ago now? Is that really what folks think protestors nowadays are arguing for? Occupy is not Stalinist. It's against the 1% playing by different rules in our legal system. It's against Wall Street's purchase of both of our major political parties. Glenn Greenwald's recent book covers it well. I just don't know anybody who's "anti-capitalist" in the sense of the guy in this video.

To imply that no one is being exploited in capitalist system is wrong. Look at all the people we have locked up in cages in our country. Look at the trafficking of women and girls. These things are driven by greed and self-interest. To act like capitalism is all ipods and the freedom to choose is laughable.

Ron Maimon writes:

This video is roughly accurate for describing life without capitalism under communism, and even life with a form of state sponsored corporate culture under fascism. This video is not very original--- there is an old Disney video here whic makes largely the same point (except emphasizing freedom to form and join a labor union, something missing from the new video): https://www.youtube.com/watch?v=0wzKlYULCkU . The older video is superior, I think.

Despite the general misery of life without capitalism, there are a few advantages, probably best understood by watching Tarkovsky's film "The Steamroller and the Violin", which is not at all a propaganda piece. It examines residual class structure in the 1960s Soviet Union, and gives a reasonable snapshot of what life was like in Moscow under Khruschev.

There are some advantages for the man in this video, in my opinion: he is not bombarded with advertizements all day, so he is free to use his mind as he feels, not as he is propagandized. So he doesn't need his stupid hair gel, his ridiculous x-box, his sugary poison-cereal or other nonsense (but of course one should not impose one's personal choices on others, as happens here). The gains are miniscule, though, and the cost is roughly accurately depicted--- loss of political freedom, loss of product choice, and general inferiority of products and general poverty--- the loss is enormous.

The problem with this video is that it is associating the source of the prosperity of markets with profit incentive for individuals, rather than with profit maximization for entities under intense competition. This is a bait and switch. A textbook free market achieves efficiency by intense competition, which minimizes costs and reshuffles the methods until they do so. It rewards people fairly, based on the demand for their skillset, and how hard they needed to work to acquire these skills. In an efficient market, the profit accumulation by corporations is all for the purpose of growing the business, not for siphoning into individual's pockets. Those people who grow successful businesses often refuse to siphon off the capitalization of their company into their pockets. This model is the bait.

The switch is that in our society, we don't get competition, we get ossified class structure, and to oppose the class heirarchy and inequality is considered an attack on efficient markets. In our society high level managers in publically traded corporations, with the help of the board of directers, reward themselves by siphoning off certain relatively small but significant fractions of corporate profits into their profits, and these quantities, when translated from the corporate scale to the personal scale are _enormous and obscene_ compensation, for work which basically anyone can do.

The modern protests against capitalism generally are not advocating centrally planned economies, and they are not advocating removing the gains of capitalism in political freedom. They have hopefully learned the lesson of the Soviet Union. They are advocating rearranging the legal system in some unspecified way (because not everyone agrees how) so that the inequality in the system is lessened, and it is possible for anyone to get a guaranteed job with a livable income. If you think this is a utopian ideal, this is what is predicted by the free market model in the first pages of any book on microeconomics. Free agents competing for wages in a free market should drive wages to near equality, and should never be forced to go long periods unemployed, since this is a complete waste of useful labor resources.

The idea that it is either carrot in the form of obscene profits, or the stick in the form of brutal police repression, is a ridiculous dichotemy, because there are at least three other options--- genuinely free market competition, or genuinely separate autonamous worker run industries, or confiscatory taxation a-la Roosevelt and Eisenhower.

All these solutions increase equality, get closer to market ideal equilibrium, and ameliorate the condition of alienation of labor. The supposed motivation for hard work from high pay in a capitalist economy without these fixes historically has only accrued to a few people at the top of a hierarchy, and generally those people don't have to work hard at all. The people who do have to work hard are best motivated by teleological considerations--- are they working for a better world? Are they making other people's lives better? This consideration drives the hard work in most successful entrepreneurship, even in the most cutthroat capitalist situations. When the big-money comes, people get rich and slack off. If you take their income and redistribute to workers, you generally have more growth and a fairer society at the same time.

To see that this slacking off isn't theory, consider what happened at Apple. Steve Jobs recounts in his biography that money poured in, and people who were once productive engineers became pampered millionaires, and could no longer do anything. Jobs set aside his money and consciously chose to maintain his modest lifestyle and working-class personality. Only in this way could he stay productive. But this choice cost him his CEO position, because he was no longer class-compatible with the managers that came into the company.

These ridiculous market rewards for Apple came from publically traded status of a new type of company, an expectation of monopoly, and it came with an attempt by the capitalist class to take over the corporate culture, an attempt which succeeded and nearly bankrupted the company, at least until Jobs was brought back. This social phenomenon at Apple was just an undisguised bourgeoise takeover of a new industry, away from the hippies that created it. It didn't come from anything competitive.

The modern quasi-socialist organizations are generally converging on a consensus that the best model is some form of collective ownership of industry which is locally profit driven, with global redistribution of profits over the whole economy. The modern state can do some planning, for research and development and infrastructure, but generally shouldn't micro-manange or take over industries.

Aside from the redistribution and state-planning part, this is also more or less the anarcho-capitalist view of how society should be run. The two don't really differ in ideal economic equilibrium, where no distribution is needed, so it is a question of which market failure is worse--- redistribution at the high government level or non-market forces taking root and dividing society by class. There is no simple answer to this.

But if one were to ask would one like to live in that miserable world without capitalism depicted in that video over living in a modern capitalist state, the answer is, probably no, but it was worth considering it for about 70 years, because the current conditions of what is called capitalism are.unendurable, and there was no other implemented path out.

Chris H writes:

Joel Johnson writes:

Didn't the Soviet Union collapse over twenty years ago now? Is that really what folks think protestors nowadays are arguing for? Occupy is not Stalinist. It's against the 1% playing by different rules in our legal system. It's against Wall Street's purchase of both of our major political parties. Glenn Greenwald's recent book covers it well. I just don't know anybody who's "anti-capitalist" in the sense of the guy in this video.

If that was really all that is involved in the Occupy movement it would be a libertarian movement. There are libertarian groups and elements within the Occupy program, but there are also very profoundly anti-free markets voices as well. For one thing, choosing Wall Street as one's target if the complaint is simply different rules for bankers seems wrong-headed. After all wouldn't that be a failure of government?

Second, let's look at the Declaration of the Occupation of New York City. Some of the points on war and bailouts sound pretty libertarian, but at the same time you see complaints about "outsourcing," "workplace discrimination," or "blocking alternative energy" (you know because we definitely haven't been giving billions in subsidies to alternative energy). These are all clear calls for expanded government intervention at the expense of capitalism. And this is not by any means the most extreme the protesters get.

When the Occupy Movement was still just starting up I visited the forums they had out of curiosity. One thread, with little dissent against the idea that I saw, argued against the very concept of money! If you want a situation as bad as the video or worse getting rid of money is probably one of the fastest ways to manage that.

Did many protesters profess a love of Stalin? No, but many were explicitly anti-capitalist. Remember that Stalinism was not an ideology that just came to some philosopher, it was the necessary application to make Marxism work in any semi-survivable way (thus why Stalinist regimes marked all countries with successful communist revolutions). Other anti-capitalist ideologies haven't been much (if at all) better (an example being Nazi Germany). So is the video justified in it's view towards at least a significent group of protesters and where their views eventually lead? Yes it was.

To imply that no one is being exploited in capitalist system is wrong. Look at all the people we have locked up in cages in our country. Look at the trafficking of women and girls. These things are driven by greed and self-interest. To act like capitalism is all ipods and the freedom to choose is laughable.

Let's go ahead and define what capitalism meant to the video. Clearly capitalism meant "free markets" not modern crony capitalism (otherwise it would have shown Ben Bernanke and farm subsidies being awesome). What are free markets? The free market system is one in which aggressive violence is not used to achieve one's ends. In this regards the focus on government intervention is justified as government is the largest and most consistent violator of free markets, but people like traffickers and murderers are more small scale violations.

Thus when the video argues for capitalism it does not argue for tons of prisoners who harmed no one. That is the result of government intervention making things illegal that should not be illegal. For trafficking (which includes men and boys as well as women and girls), that's a violation of the non-aggression rule and can also be linked to government failure (namely the failure to use police resources to hunt down more traffickers rather than more drug dealers). To be fair, I cannot promise that free market courts/protection agencies would be able to stop all slavery anymore than governments have been able to stop all of it. I can promise however that the incentive structure for free markets groups to stop trafficking would be greater than that of governments.

Please do remember that while a capitalist can be greedy, so can other people. When someone aggresses against another person they are acting in a way explicitly in opposition to capitalism, and to which there would be economic incentive structures to fight such violations in a free market system (because who really wants to go around worrying about be stabbed everyday? If people want to have something or avoid having something there is money to be made in ensuring those things either happen or don't depending on consumer preferences).

Ken B writes:

I think Joel is reacting to the fact the video never really explains. It just asserts. Joel is right about that.
As David notes, it does satirize a recognizable type. So I expect it will appeal to those who like the satire: the already convinced (like David) and maybe some who are undecided.

Methinks writes:

Is that really what folks think protestors nowadays are arguing for? Occupy is not Stalinist. It's against the 1% playing by different rules in our legal system.

Joel, I will point out that pre-1917 socialists weren't arguing for the Soviet state either. Nobody does - it's just what we end up with. Everywhere where the alternatives to capitalism were tried, human misery increased. Thus, it is at this point ridiculous to claim that arguing for alternative systems is not arguing for increased human misery.

The occupy and other "movements" argue for more redistribution, not for Rule of Law. Either that or they think "equality under the law" is defined as "equality of outcomes".

Look at all the people we have locked up in cages in our country. Look at the trafficking of women and girls. These things are driven by greed and self-interest. To act like capitalism is all ipods and the freedom to choose is laughable.

I don't know what you mean by "locked up in cages", but if you mean that our drug laws are ridiculous, then I agree. However, trafficking of women and girls is not a hallmark of capitalism. If anything, abuse of the weak (supposing women are weak. As a woman, I don't subscribe to that view) is prevalent in non-capitalist societies. Capitalism offers the individual options Socialism doesn't and more options means that people are less easily abused. Greed and self-interest are human traits, not characteristics of an economic system. These traits can't be legislated out of humanity and nowhere is greed and self-interest expressed in a more vulgar way than in a socialist society.

Methinks writes:

There are some advantages for the man in this video, in my opinion: he is not bombarded with advertizements all day, so he is free to use his mind as he feels, not as he is propagandized.

Are you bloody serious? We were CONSTANTLY propagandized. How so you think it's possible to convince people to sacrifice so dramatically without propaganda?

The state can't plan. It's the old knowledge problem, my dear. They ain't got 'nuff of it to fulfill the fantasy.

Comments for this entry have been closed
Return to top